Annuity Lesson #22
Best Variable Annuities Compared
[2025 Update]
Jeremiah Konger
CEO
"An annuity may be particularly valuable for women who are concerned about outliving their money."
Annuities have become a popular choice for retirees who want to grow their savings and ensure a guaranteed income not just for a few years but for life!
However, despite these advantages of fixed annuities, many people are unhappy with lower interest rates and the risk of losing the value of their savings over time.
At the same time, variable annuities are somewhat of a mystery for investors as the outcomes of these financial products are harder to calculate.
So, why would anyone invest in a variable annuity? One of the reasons is that this type of annuity offers the highest potential. Just like hunting for a mutual fund, proper research is a step you can’t skip when looking for a good annuity offer.
In this guide, we will help you find the best variable annuities based on their growth potential, fees, riders, and more! Choose right, and your financial future will be in good hands.
Overview of the Best Variable Annuities
A variable annuity is an investment you make into your future. In simple words, it is a contract between you and an insurance company. According to this contract, you pay a lump sum of money or make a series of payments in order to receive a continuous income at a later date.
So, what are the best variable annuities on the market? The truth is, there isn’t a single “best” annuity—each product is designed to meet different financial goals. What works for one person may not be the best fit for another. For example, your friend may look for an immediate payout, while you may prioritize higher growth potential or low fees. The key is to find a variable annuity that aligns with your individual needs and long-term retirement strategy.
At Annuity Association, we did all the heavy lifting and compiled a comparison table with the best variable annuities for different purposes:
| Category | Best Variable Annuity | Key Features |
|---|---|---|
| Best for Growth 📈 | Fidelity Personal Retirement Annuity (PRA) Vanguard Variable Annuity | ✅ Low-cost investment options ✅ Strong market performance potential |
| Best for Low Fees 💰 | Fidelity Personal Retirement Annuity (PRA) | ✅ 0.25% annual fee, one of the lowest in the industry |
| Best for Market Protection 🛡️ | Prudential HD 2.0 | ✅ Daily high-water mark with 5% guaranteed growth |
| Best for Income 💰 | Jackson LifeGuard Freedom 6 | ✅ 6% roll-up rate, flexible withdrawal options |
| Best for Death Benefit 🧑🤝🧑 | Nationwide Combination Death Benefit | ✅ Locks in the highest account value for beneficiaries |
| Best for Customer Satisfaction & Strength 🧮 | New York Life | ✅ Strong financial ratings ✅ High customer satisfaction |
How to Select the Right Variable Annuity?
Among numerous variable annuities, finding the one to match your financial goals may be daunting. That’s why we have prepared key criteria that will help you narrow down your search and invest in the right product.
Before you put your signature in the annuity contract, make sure you’ve thought through every factor:
Define Your Primary Goal
If your primary goal of buying a variable annuity is to maximize your savings–that’s totally fine. But there may be other goals you want to achieve, especially when purchasing a long-term annuity.
See the goals below and ways to achieve them:
- Growth: Look for low-fee annuities with diverse investment options to maximize returns.
- Guaranteed Income: Check annuities with Guaranteed Lifetime Withdrawal Benefits (GLWB) for steady retirement income.
- Legacy Planning: Choose an annuity with a strong death benefit rider to protect your heirs.
Compare Fees and Costs
Most fixed annuities don’t have any charges or maintenance fees–however, the same cannot be said about variable annuities. Since they are more comprehensive and require administrative work, you are likely to pay annual fees.
When checking the variable annuity costs, make sure to check for the tiny print stating the following costs:
- Mortality & Expense (M&E) Fees: Typically range from 0.50%-1.25% of the annuity's value.
- Investment Fund Expenses: Fees vary from 0.50%-2.00%, depending on the chosen sub-accounts.
- Rider Fees: If you add riders, expect an additional 1%-2% fee for income or death benefit guarantees.
💲 For low-fee annuities, check out Fidelity Personal Retirement with a 0.25% annual fee.
Assess Income Guarantees
Most future retirees invest in variable annuities with guaranteed lifetime income. However, there are a few things to pay attention to:
- Roll-Up Rate: This determines the guaranteed annual growth of your income base (usually 5%-7%).
- Withdrawal Rate: The percentage you can withdraw for life (varies by age and contract terms).
♾️ Among the best variable annuities, Jackson LifeGuard Freedom 6 offers a 6% roll-up with flexible withdrawals.
Check Death Benefits
Variable annuities may come with a death benefit rider. This add-on can secure financial stability for your beneficiaries after your passing. If you purchase a variable annuity with a death benefit, your heirs may receive either of the payments:
- Return of Premium (ROP): Guarantees your beneficiaries receive at least your original investment.
- Step-Up Features: Locks in the highest contract value to provide better inheritance benefits.
👪With the Nationwide Combination Death Benefit, your partner, children, or any other beneficiary can receive the highest contract value.
Choose a Financially Strong Insurer
Let’s say you’ve found a great variable annuity; what’s next? Before you sign the contract, it’s worth checking the insurance company. In addition to clients’ reviews, there are a few more factors to take into consideration:
- Financial Ratings: Look for A++ ratings from A.M. Best, S&P, and Moody’s.
- Customer Satisfaction: Check J.D. Power rankings for service quality.
📱New York Life is known for its financial strength and customer satisfaction.
Not sure what annuity suits your financial goals? Talk to an Annuity Association advisor today for expert guidance and personalized recommendations! Schedule a consultation now.
Best Variable Annuities in 2025
At Annuity Association, we’ve carefully analyzed the best variable annuities based on riders, fees, and their growth potential. Additionally, we included the pros and cons of each product and shared our take on them.
Note that even though these annuities are rated highest–they still may not match your goals. To understand what investment can help you achieve financial stability, schedule a consultation with one of our advisors.
Best for Growth: Vanguard Variable Annuity
🔹 Company: Vanguard
🔹 Description: A solid choice for investors seeking strong index fund investment options with a trusted brand.
Key Facts
- Annual Fee: 0.56% fund expense ratio
- Investment Options: Strong index fund selection
- Surrender Charges: None
- Minimum Investment: $5,000
PROS
✅ Low-cost structure
✅ High-quality index fund investments
✅ No surrender charges
CONS
❌ Higher fee than Fidelity PRA
❌ Fewer actively managed fund choices
Annuity Association Take
If you’re looking for an annuity that can provide long-term growth, the Vanguard Variable annuity may be the right choice for you. With affordable fund options, you can save on expenses and benefit from market-driven growth.
Another advantage is the 0.56% fund expense ratio which is one of the most cost-effective, not to mention that this annuity is focused on maximizing investment returns.
On the downside, the Vanguard Variable annuity doesn’t have a guaranteed income rider. Hence, if it’s not a priority, you can still benefit from a low-cost and growth-oriented annuity.
Best for Low Fees and Growth: Fidelity Personal Retirement Annuity (PRA)
🔹 Company: Fidelity Investments
🔹 Description: A low-cost variable annuity designed for investors looking for tax-deferred growth with minimal fees
Key Facts
- Annual Fee: 0.25% (lowest in the industry)
- Investment Options: Broad selection of Fidelity-managed funds
- Surrender Charges: None
- Minimum Investment: $10,000
PROS
✅ Lowest fee in the industry (0.25%)
✅ No surrender charges
✅ Strong Fidelity fund lineup
CONS
❌ Limited non-Fidelity investment options
❌ No guaranteed lifetime withdrawal benefits (GLWB)
Annuity Association Take
One of the best variable annuities is the Fidelity PRA because it is another low-cost investment that allows you to grow your savings tax-deferred. The biggest advantage of this product is its low fee, just 0.25%. Additionally, there are no surrender charges.
Unfortunately, this annuity also lacks a guaranteed income rider–hence, it may not be ideal for investors who need a lifetime source of income.
Best for Market Protection: Prudential Highest Daily Lifetime Income 2.0
🔹 Company: Prudential
🔹 Description: Designed for market protection with a daily lock-in of high-water marks and a 5% guaranteed growth rate.
Key Facts
- Annual Fee: Varies with rider selection
- Investment Options: Daily high-water mark lock-in
- Surrender Charges: 5% per year
- Minimum Investment: $25,000
PROS
✅ Daily lock-in of highest market values
✅ 5% guaranteed growth for lifetime income
✅ Strong insurance backing
CONS
❌ Higher fees than standard variable annuities
❌ Complex product structure
Annuity Association Take
Prudent HD 2.0 can be a great option for investors who want to benefit from investment growth but have concerns about market volatility. This product offers the daily high-water mark lock-in that ensures you capture market highs. At the same time, if anything happens, you will also have a safety net in the form of 5% guaranteed growth.
Having said that, this added security comes at a greater cost. This annuity has fees that can be higher than other variable annuities on our list.
Best for Lifetime Income: Jackson LifeGuard Freedom 6
🔹 Company: Jackson National Life
🔹 Description: Provides a 6% roll-up rate and flexible withdrawal options, making it a top choice for a lifetime income.
Key Facts
- Annual Fee: Varies with rider selection
- Investment Options: 6% roll-up rate
- Surrender Charges: Based on market performance
- Minimum Investment: $25,000
PROS
✅ 6% guaranteed roll-up rate
✅ Flexible withdrawal options
✅ Strong income guarantees
CONS
❌ Can have high rider fees
❌ Subject to investment market fluctuations
Annuity Association Take
If your main priority is guaranteed lifetime income, Jackson LifeGuard Freedom 6 is the best variable annuity available. With a 6% roll-up rate and flexible withdrawal options, it provides strong growth on your income base. Additionally, you can benefit from flexible withdrawals. However, be mindful of rider fees and market fluctuations that can impact withdrawals.
Best for Death Benefits: Nationwide Combination Death Benefit
🔹 Company: Nationwide
🔹 Description: Designed for legacy planning, this annuity locks in the highest contract value or guarantees 5%, compounding up to 200% of the initial investment.
Key Facts
- Annual Fee: Varies with rider selection
- Investment Options: Strong index fund selection
- Surrender Charges: Up to 200% of the original investment
- Minimum Investment: $25,000
PROS
✅ Locks in the highest contract value
✅ Guarantees growth for beneficiaries
✅ Strong legacy planning tool
CONS
❌ Higher rider fees
❌ Limited investment flexibility
Annuity Association Take
The Nationawide’s Combination Death Benefit certainly stands out because it ensures financial security for your beneficiaries. And to have peace of mind if anything happens to you, this annuity locks in the highest contract value or guarantees 5% compounding growth (up to 200%).
The only downside is the higher fee of the annuity. So, if paying a bit extra for the security won’t hurt your savings, this annuity can create a safety net for both you and your heirs.
Best for Customer Service & Financial Strength: New York Life
🔹 Company: New York Life
🔹 Description: With an A++ financial strength rating and high customer satisfaction, New York Life is a leader in retirement annuities.
Key Facts
- Annual Fee: A++ (AM Best)
- Investment Options: Top-rated in J.D. Power rankings
- Product Variety : Strong annuity lineup
- Minimum Investment: Varies by product
PROS
✅A++ financial strength rating
✅ Excellent customer service
✅ Trusted brand with long history
CONS
❌ Higher fees than competitors
❌ Less aggressive growth potential
Annuity Association Take
If financial security and customer service are your top concerns, New York Life is the most reliable annuity provider. With an A++ financial strength rating and top-tier customer service rankings, it’s a great choice for those who want a trusted name handling their retirement income. The trade-off? Fees tend to be higher, and growth potential is lower than some competitors.
Wrapping Up
When looking for investment, you obviously want to find annuities from the best variable annuity companies. However, as much as you would like to find a universal product, each of them varies based on growth potential, fees, customer service, and more. Hence, to find the “best” investment opportunity, you should know whether it fits your needs.
To do that, compare fees, reviews, and riders of variable annuities. Next, make sure your choice aligns with your goals.
If you're uncertain whether your annuity truly delivers on its promises, Annuity Association can help you cut through the fine print. Schedule a call with our experts for personalized guidance and confidently choose the best option for your financial future.
Annuity Expert
Jeremiah Konger
PS - Here's 3 ways we can help you learn more about annuities.
1. Watch Videos on How to Identify The Highest Paying Protected Income & Growth Annuities.
2. Watch Videos That Reveal What to Look For When Buying A Protected Growth Annuity.
3. Click Here To Access Our Annuity Review Vault To Compare The Pro's and Con's of Dozens of Annuities.
Annuity Association is the leader in providing Independent Annuity recommendations for protected income, safe growth and other benefits in retirement.
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